Investment Thesis
Capstone Green Energy faces severe financial distress with negative stockholders' equity of -63.3M, indicating liabilities exceed assets by a substantial margin. While revenue grew 22.5% YoY and the company generates positive operating cash flow, profitability margins are razor-thin (1.6% net margin) and liquidity is critically weak with a current ratio of 0.69x, creating meaningful solvency risk.
Strengths
- Revenue growth of 22.5% YoY demonstrates operational demand for its products
- Positive operating cash flow of 2.0M and free cash flow of 1.2M show the business generates some cash despite thin margins
- Gross margin of 32.5% indicates reasonable pricing power at the product level
Risks
- Negative stockholders' equity of -63.3M represents technical insolvency and suggests accumulated losses exceed retained capital
- Current ratio of 0.69x and quick ratio of 0.44x indicate severe liquidity stress; company cannot cover short-term obligations with current assets
- Net margin of only 1.6% and diluted EPS of -2.79 show minimal profitability generation relative to revenue; any revenue decline would quickly swing to losses
- Long-term debt of 25.3M represents significant leverage given the weak equity base and thin cash generation
Key Metrics to Watch
- Stockholders' equity trend and path to positive equity restoration
- Current ratio and cash balance to assess immediate liquidity sustainability
- Net margin expansion and operating leverage as revenue scales
- Debt refinancing risk and covenant compliance given negative equity position
Financial Metrics
Revenue
83.0M
Net Income
1.3M
EPS (Diluted)
$-2.79
Free Cash Flow
1.2M
Total Assets
87.7M
Cash
14.4M
Profitability Ratios
Gross Margin
32.5%
Operating Margin
3.9%
Net Margin
1.6%
ROE
N/A
ROA
1.5%
FCF Margin
1.4%
Balance Sheet & Liquidity
Current Ratio
0.69x
Quick Ratio
0.44x
Debt/Equity
N/A
Debt/Assets
91.3%
Interest Coverage
3.24x
Long-term Debt
25.3M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-22T06:10:11.305368 |
Data as of: 2025-12-31 |
Powered by Claude AI